Skillz Inventory Tumbles on Bearish Commentary from Eagle Eye Analysis


Posted on: April 20, 2021, 12:18h. 

Final up to date on: April 20, 2021, 01:42h.

Skillz (NYSE:SKLZ) inventory is getting pounded once more as we speak after one other bearish analysis report surfaced on social media – this one alleging the corporate is utilizing accounting gimmickry to overstate the well being and dimension of its enterprise.

Skillz stock
Skillz CEO Andrew Paradise. The inventory is getting slammed by one other bearish analysis report. (Picture: Flipboard)

In late buying and selling, shares of the cellular video games developer are off greater than 11 %, extending a slide that’s seen the identify shed a staggering 47.25 % over the previous month. In a chunk posted to Twitter yesterday, a person often known as Eagle Eye Analysis claimed money income represented 29 % to 47 % of Skillz’s usually accepted accounting ideas (GAAP) gross sales over the previous three years, promising to “deconstruct this accounting sleight-of-hand over the following few days.”

We imagine the corporate possible acknowledges substantial non-cash income, and imagine that money income could also be lower than half of GAAP income,” mentioned Eagle Eye in its report. “The corporate has by no means turned a revenue and we doubt it ever will.”

That is the third time in just greater than a month that bearish analysis surfaced on Skillz, which has been a stand-alone public entity simply 5 months following a merger with a particular objective acquisition firm (SPAC).

Tumultuous Occasions for Skillz Inventory

Wolfpack Analysis obtained the bear assault on Skillz rolling final month, saying the “progress projections SKLZ and its SPAC sponsor proceed to current to buyers are solely unrealistic.”

That was adopted up by a 22-page missive from a Twitter account often known as @Restrinct, who famous Skillz faces dangers by way of a ban from the Google Play retailer, and that the corporate earns simply 80 cents price of progress for each $1 it spends on promoting.

The San Francisco-based firm mentioned these studies are affected by inaccuracies, however hasn’t publicly elaborated past that. Within the meantime, Skillz inventory is 72 % under its excessive and the previous month has been significantly brutal with the identify faltering regardless of first rate income steering issued in late March.

An enormous secondary fairness sale revealed final month didn’t assist issues. Skillz bears identified CEO Andrew Paradise offered a few of his shares into that providing — a transfer being construed as a adverse signal by these lining up towards the inventory.

For Eagle Eye’s half, that researcher says Skillz trades at valuation corresponding to a “disruptive” cloud computing agency when it actuality it’s “a subscale cellular recreation writer in a aggressive trade.” The operator of the Twitter account forecasts 80 % draw back for Skillz inventory from present ranges. Based mostly on Monday’s shut at $14.11, if that estimate is correct, Skillz would commerce under $3.

Web Defending Skillz

In as we speak’s period of extremely empowered retail buyers, some try to leverage social media to assist Skillz inventory. Critics of the Eagle Eye report aren’t taking it idly, with one Twitter person saying the analysis is not more than help for hedge funds which are brief the inventory. One other slammed the novelty of the Eagle Eye Twitter deal with.

Others are speculating, provided that one among Eagle Eye’s first Twitter follows was Wolfpack Analysis, that the companies are in cahoots with one another, or that the social media accounts are operated by the identical individual.

Affirmation on the conjecture stays to be seen. however with Skillz inventory needing to just about quadruple to get again to prior highs, it’s clear bears have the higher hand for now.

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